Amid Ripple’s move to acquire a national banking license, U.S. banking regulators have released new guidance on crypto custody, which could soon apply to the crypto firm. Crypto commentator Pumpius also highlighted what this could mean for XRP and other crypto assets.
In a press release, the Federal Reserve, Office of the Comptroller of the Currency (OCC), and Federal Deposit Insurance Corporation (FDIC) noted that existing laws, regulations, and risk-management principles also apply to crypto custody. Ripple has applied for a banking license, and if successful, it would be regulated by the OCC. As such, this guidance is one that the crypto firm should pay attention to.
The release stated that banking organizations may provide safekeeping for crypto assets in a fiduciary or nonfiduciary capacity. A firm like Ripple holds RLUSD and XRP, which it uses to facilitate its payment services. As such, there are instances where the crypto firm could hold clients’ funds as part of its operations.
These regulators’ acknowledgment of cryptocurrencies also marks a huge win for the crypto industry, given the Operation Chokepoint under the Biden administration, which led to the debanking of several crypto firms. Now, crypto firms like Ripple do not only have the option of custodying their assets with other banks but will also be able to do so with a banking license on the horizon.
It is worth noting that the OCC is expected to decide on Ripple’s application within 120 days. There is also the possibility that the decision could come sooner, given the regulatory-friendly environment for the crypto industry under the Donald Trump administration. In the meantime, guidance from banking regulators also lends more legitimacy to the crypto firm’s decision to custody its RLUSD reserves with BNY Mellon.
In an X post, Pumpius highlighted why this guidance from the banking regulators matters for XRP, given its ties to Ripple and projections that it could play a major role in banking at some point. He noted that this move means that U.S. banks can directly custody the altcoin for clients from retail to institutional.
The crypto commentator further indicated that this development matters because Ripple’s private ledger, BNY Mellon custody, and RLUSD integration are being built for this moment when XRP takes over the banking rails. He added that the XRP Ledger is “battle-tested and institution-ready.” In line with this, Pumpius declared that this isn’t just crypto adoption but the institutionalization of XRP as the “ultimate reserve rail.”
At the time of writing, the XRP price is trading at around $3.08, up over 5% in the last 24 hours, according to data from CoinMarketCap.
Featured image from iStock, chart from Tradingview.com
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